Bus591 Week Discussion 1 Essay

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Discuss current liabilities and long-term liabilities. What are the differences between the two? Illustrate your understanding of liabilities, making sure to identify major types of current liabilities. Respond to at least two of your classmates’ posts. Current liabilities are those that can be paid off within one year, it is considered a short term debt. On the other hand, long term liabilities is just that, long term. Things that a company plans to keep on the books for longer than a year. Current liabilities require the use of current assets to satisfy them, long term liabilities do not. Current liability examples: wages, utilities, payroll taxes , accounts payable, short term notes Long term liability examples: Leases, deferred expenses, pensions, mortgage loans Obtain a copy of Colgate’s annual report from the Ashford Online Library or from a valid academic source found elsewhere on the Internet. Use this information to answer the following questions. If researching online, go to the Colgate company website (http://www.colgate.com). Use the ratios discussed in Chapter 11 (dividend payout ratio and return on common stockholders’ equity) to evaluate Colgate’s dividend and earnings performance from a stockholder’s perspective. Your answer should illustrate understanding of dividend ratios and return on equity ratios, an analysis of financial statements. Respond to at least two of your classmates’ posts. The formula to figure dividend payout ratio is dividing total cash dividends declared to common shareholders by net income. 2012 Dividends (dollars in millions) - 1,277 Net Income (dollars in millions) - 2,472 1277/2472 = 51.7% 2011 Dividends (dollars in millions) - 1,203 Net Income (dollars in millions) - 2,431 1203/2431 = 49.5%. Return on common stockholders' equity is determined by dividing net income available to common stockholders

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